Setting up and managing payroll in New Zealand
New Zealand is a great place to do business and an attractive target country for many organizations’ global expansion efforts. Its proximity and close links to Australia, advanced economy, and highly-educated workforce also make it an excellent place to hire.
To hire employees in New Zealand, you will need to establish a New Zealand payroll and may need to register an official entity. This is a complicated process and requires strict adherence to the country’s unique regulations and application procedures. Because of this, the payroll setup process can take longer than expected and cause delays with expansion efforts, potentially costing your business in lost revenues.
At Horizons, our experts offer New Zealand payroll outsourcing setup and management outsourcing, enabling your organization to start hiring and expand more quickly and efficiently, whether or not you already have an established entity in the country.
Why choose the Horizons payroll solution?
If you have an entity
If you have already registered an entity in New Zealand, then we can take care of your payroll setup and management, using our expert knowledge of New Zealand’s regulations to keep you fully compliant.
This service is well-suited to larger organizations and those looking to establish a long-term presence in New Zealand.
If you don’t have an entity
If you haven’t yet registered an entity in New Zealand, then we can offer our New Zealand PEO to act as employer of record for your new employees. In addition to this, we can handle all of your New Zealand payroll outsourcing setup and management to ensure compliance with the local regulations.
This service is perfect for any business interested in low-risk and flexible expansion into New Zealand.
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New Zealand payroll guide
Tax and withholdings in New Zealand
Following the progressive taxation system, New Zealand employees are required to pay more tax at higher levels of income. The income tax rate ranges from 10.5% up to 33% for the highest bracket.
With a Pay As You Earn (PAYE) system, taxes are taken before salaries are paid. Employers need to contribute to the KiwiSaver program, which is the mandatory pension program. The rate of contribution depends on the employee’s own contributions.
The corporate tax rate in New Zealand is 28%.
| KiwiSaver (minimum employer contribution) | 3.0% |
| Total Employment Cost | 3.0% |
KiwiSaver | 2.0%-10.0% |
| Total: | up to 10.0% |
|
$0.00 – $14,000
|
10.5%
|
|
$14,001 – $48,000
|
17.5%
|
|
$48,001 – $70,000
|
30.0%
|
|
$70,001 and over
|
33.0%
|
Rules for entitlements and terminations in New Zealand
Whenever hiring in New Zealand, employees should be provided with a formal contract of employment with all entitlements and termination terms detailed clearly and agreed upon.
There are no mandatory severance payments, so employers need to follow the terms set out in the contract.
There is no minimum notice period for terminations, and this also follows the terms laid out and agreed upon in the contract of employment, but common notice periods are between two weeks and one month.
How to establish New Zealand payroll outsourcing
To establish your New Zealand payroll, you’ll first need to register your business with the government. Additionally, you’ll need to apply for an IRD number for taxation purposes, register for Gross Service Tax, open a bank account, and more.
To bypass this complex administration and forego any delays, you can choose to outsource your payroll setup and management to Horizons.
We will take care of all the administration, HR, and compliance work, and even provide our New Zealand subsidiary to act as employer of record for your hirees. With our help, you can be up and running in New Zealand quickly, cost-effectively, and compliantly, whether or not you already have an entity in the country.
Manage payroll in New Zealand
Whether it’s EOR service or just payroll management, Horizons’ employment experts can help you get started in 24h.
